Rising prices of steel spook fear in industry: FICO

FICO sends a written communication to PM Narendra Modi

Rising prices of steel spook fear in industry: FICO

Ludhiana: Federation of Industrial & Commercial Organization (FICO) under the leadership of K.K. Seth Chairman FICO along with Gurmeet Singh Kular President FICO sent a written communication to Narendra Modi Prime Minister, and demanded that the Government should take suitable steps to ring fence and scrutinize the business strategies of steel companies to check if they have colluded and cartelized to jack up prices artificially. 

They further said that the Steel companies have been blaming the sharp rise in raw material cost especially surge in iron ore prices, due to which there is increase in prices. But Mr. Nitin Gadkari, Union Road Transport Minister, had said that every steel company has its own iron ore mines and there has been no increase in labour and power tariff but still they are continuously increasing rates. 

It is notable that in the domestic market, steel is trading at an all-time high in May 2021, the Indian steel players shoot up prices of Hot Rolled Coil (HRC) by Rs. 4000 to 67000 per tonne and Cold Rolled Coil (CRC) by Rs. 4500/- to Rs. 80000/-per tonne. This has impacted the engineering industry especially automobile and bicycle manufacturers which are already reeling due to second wave of the Covid-19 pandemic and lock downs in the various parts of the country. 

MSMEs numbering over 63 Millions employ over 110 million people are life line of the Indian economy are at a verge of collapse and brink of closure. They account for over 45 percent of exports and contribute over 30 percent of the National GDP. Any setback to this segment shall adversely affect the 'Make in India' campaign and the Nation's economy but only increasing unemployment. MSME in general and those consuming Steel as raw material in particular are facing existential crisis due to the exploitative and unethical pursuits of the cartel of these big steel producers. MSMEs are already reeling under the debilitating impact of Covid-19 and lockdowns. More than 25 percent have defaulted in loan repayment resulting to NPA and also due to poor performance the bank borrowing limits have not been enhanced. 

The steel manufacturing giants having monopoly are exporting as much as possible to get maximum profits and benefits. The dependent domestic manufacturers are bearing the brunt as the steel is available to them at exorbitant rates. The steep hike in steel prices is not market driven. Stimulus packages have increased the consumption in global market. 

Predominantly this cartel is taking advantage of its monopoly to make super profits. The financial results as well as astronomical rise in share prices of these big-wigs in the past six months are witness to their naked exploitation. 

FICO requested the Government of India to: 
•    Direct The Roll Back of Steel Prices to The December 2020 Level. 
•    Setup A Steel Prices Regulatory Authority. 
•    Direct A Time Bound Completion of Ongoing Enquiry in Monopolistic Manipulations Of Steel Prices By The Competition Commission

Amongst Present were K.K. Seth Chairman FICO, Gurmeet Singh Kular President FICO, Rajeev Jain General Secretary FICO, Gurvinder Singh Sachdeva Head Trade Division FICO, Satnam Singh Makkar Propaganda Secretary FICO, Gurmukh Singh Rupal Head Sewing Machine Division FICO.